The prime rate for credit operations in Mozambique will remain at 20.61 PT2T in October, the fifth consecutive month with the same value, the Mozambican Association of Banks (AMB) announced today..

The rate calculated monthly by AMB and Banco de Moçambique (BM) is based on a single indexer (calculated by the central bank) fixed at 15.3% and a cost premium of 5.3% (defined by AMB), both unchanged.

In May the prime rate had risen 50 basis points and in June it rose 150, to the current value.

The increases were associated with the central bank raising the monetary policy interest rate (MIMO rate, which influences the formula for calculating the 'prime rate') in order to control inflation.

According to Lusa, the homologous inflation in Mozambique was 12.1% in August, the highest value of the last four years and eleven months, announced the National Institute of Statistics (INE).

Food, non-alcoholic beverages, and transport have been the goods and services that have contributed the most to price increases in Mozambique.

The creation of the 'prime rate' was agreed in 2017 between the central bank and the AMB to eliminate the proliferation of reference rates in the cost of money.

At the time, it was launched with a value of 27.75% and has dropped 715 basis points since then.

The goal is that all credit operations will be based on a single rate, "plus a spread, which will be added to or subtracted from the prime rate according to the risk analysis" of each contract, explain the promoters.